Editors Note: Despite facing a complex international situation and multiple headwinds, Chinas economy expanded by 5.2 percent in 2023, surpassing the target. However, a new wave of very negative narratives about Chinas economy has emerged in the Western media lately, attempting to undermine investors confidence in Chinas future. To counter Western medias malicious distortions that clearly deviates from the real state of the Chinese economy, the Global Times (GT) invited Jeffrey Sachs (Sachs), a world-renowned American economist, to provide his perspectives.
GT: How do you view the 5.2 percent growth of Chinas economy in 2023, the first year of the post-COVID recovery amid global gloom?
Sachs: This is a very respectable performance. US growth was about 2.5 percent. Remember too that the US population is growing about 0.5 percent per year, while population growth in China is essentially zero, so Chinas growth advantage is even greater when expressed in per capita terms.
GT: Mainstream US media and well-known economists criticized the performance of the Chinese economy in 2023 as being "weak." Many headlines claimed that the "Chinese economy encountered trouble and various indicators fell short of expectations." What is your perspective on that?
Sachs: The US government is actively trying to slow the Chinese economy through erecting trade and technology barriers. The US has put up barriers to Chinas exports to the US through both formal means such as tariffs and informal arm-twisting of US companies. The US has also introduced technology and investment barriers.
The US government and therefore the mainstream media are promoting the view that Chinas economy is in trouble. This is a bit of an echo chamber. One reporter close to the government writes it, and then other reporters repeat the same exaggerated story. They dont know much about China or about the deep strengths of Chinas economy, including major advances in technology, global export competitiveness, and high saving and investment rates.
US attempts to weaken the Chinese economy may have some modest short-run consequences (mainly slower export growth by Chinese companies and modest displacements of investments from China into ASEAN countries) but the adverse effects will not be large, in my view. The US governments mischief will fail, as it should.
GT: There were many new bright spots in Chinas economy in 2023. Exports of the "new three items" - electric vehicles (EVs), lithium batteries and solar cells - for the first time exceeded the 1 trillion yuan ($140 billion) mark. China became the largest EV exporter in 2023. How do you view these new growth engines?
Sachs: China is the worlds low-cost producer of most green and digital technologies, such as EVs, photovoltaic systems and 5G equipment. This will put China in a strong global position for the coming decade, since the world needs to make a major energy transition and China will be a key provider of the new low-carbon infrastructure, connectivity and appliances.
GT: Chinas economic work is increasingly focused on expanding domestic demand. How do you view the advantages of Chinas large home market, and what suggestions do you have for fully tapping the potential of domestic market in China?
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Sachs: I believe that China should still strive for export-led growth, but now more to the emerging market economies (BRICS, African Union, Latin America, Western Asia, Central Asia) than to the US or the EU. China should be the key provider for the green and digital transformation of the worlds emerging economies. This will be good for China, for Chinas trade partners and for global environmental protection. The Belt and Road Initiative (BRI) remains very important in this regard. China should continue to champion the BRI as a very important initiative for global transformation, global growth and Chinas economic growth.
GT: What do you believe will be the key driving factors for Chinas economy in 2024?Sachs: The key factors will be Chinas successful promotion of global growth in the emerging/BRICS economies, as well as Chinas continued dynamism in technological advancement - in artificial intelligence, semiconductors, zero-carbon energy, battery technology, precision medicine, precision agriculture, low-carbon transport (shipping and aviation), high-speed rail and other areas.
GT: How do you evaluate the current economic situation of China? How do you view Chinas economic prospects in 2024? Which areas do you think offer the greatest opportunities?
Sachs: As Ive said, I believe that Chinas growth will be quality-based, mainly through technological upgrading, digital applications and the green transformation. This will happen within China and also between China and its major trading partners in Asia, Africa and Latin America. Of course, I hope that the US stops its trade war with China, which violates the WTO and is bad for the US and unhelpful for China.
GT: Global growth is projected to slow for the third year in a row - from 2.6 percent last year to 2.4 percent in 2024, the World Bank said. In a world battling economic uncertainties, how should major economies jointly tackle challenges and promote global growth rather than politicizing economic issues?
Sachs: The main solutions to the world economy are to stop the wars in Ukraine and the Middle East, reduce trade tensions between the West and China, and cooperate on building an efficient digital, green global economy. All of this is possible through diplomacy.
The US should stop immediately trying to expand NATO to Ukraine, thereby ending the war in Ukraine. The US should stop arming Israel, thereby ending the war in the Middle East. And the US should abide by agreements with China regarding the Taiwan island, so as to reduce the tensions over Taiwan. In the 1982 US-China Communique, the US promised to phase out arms sales to Taiwan. The US should honor its agreements, leading to peaceful relations and a reduction of tension.
GT: How do you view the global significance of the steady and positive development of Chinas economy?
Sachs: Chinas economic progress has been extraordinarily positive for the Chinese people and very good for the world. Economic progress anywhere, including in China, is a win-win proposition for the world. The US mistakenly thinks that the world economy is a "zero-sum" struggle, in which Chinas progress is somehow bad for the US. This is a badly mistaken view.
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